Carlyle buys TCW from Societe General in major deal

PE firm adds asset manager to its growing portfolio; capital requirements prompt sale by Societe Generale
JUN 14, 2012
Carlyle Group LP (CG) agreed to buy TCW Group Inc. from Societe Generale SA (GLE) in a deal that will give TCW's management and employees a 40 percent stake. Carlyle will fund the purchase of the $127 billion money manager through two of its private-equity funds and with money from TCW's management, according to a joint statement today from the Washington-based private-equity firm and the Los Angeles- based asset manager. Financial terms of the deal weren't disclosed. “TCW is a premier global asset manager that will become even stronger as a free-standing company with increased employee ownership,” Olivier Sarkozy, who heads the Carlyle team that makes investments in financial-services firms, said in the statement. Europe's sovereign-debt crisis has prompted Societe Generale and other banks to bolster capital to comply with new regulations. The Paris-based bank, France's second-largest, agreed to buy 51 percent of TCW in 2001 for about $880 million. TCW in 2009 fired top-ranked bond-fund manager Jeffrey Gundlach, who subsequently started his own firm, DoubleLine Capital LP. David Lippman, formerly head of fixed income at TCW, will become president and chief executive officer of the company, and Marc Stern, who was CEO, will become TCW's chairman. Gundlach, TCW's former chief investment officer, had offered to buy 51 percent of the business for about $350 million in September 2009, valuing the asset manager at about $700 million, according to court documents filed last year. He was dismissed by TCW about three months later. Gundlach's Departure TCW said it would acquire Los Angeles-based Metropolitan West Asset Management on the same day it fired Gundlach, as it sought to replace the manager and his team and add mutual-fund assets. TCW was founded in 1971 by Robert Day, the grandson of Superior Oil Co. founder William Keck, as Trust Company of the West. TCW's clients include corporate and public pension plans, financial institutions, endowments, foundations and high-net- worth investors. The firm also sells mutual funds to individual investors. --Bloomberg News--

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